Before everyone gets up in a big frenzy on the price, read the article (closely):
"It isn’t clear how much Wal-Mart would pay, but a person familiar with the matter said Jet could be valued at up to $3 billion in private markets."
That is nowhere near a statement that $3B is number from Wal-Mart. That means "someone" thinks they COULD be valued at UP TO $3B in "private markets". That "someone" could be Jet's CEO. Or their banker.
Wal-Mart isn't dumb. In fact, they're the opposite of dumb when it comes to paying for things. They wouldn't pay $3B for a failed ecommerce startup if they can let it fail and buy the assets or pay much, much less in various other scenarios.
I doubt we'll see this deal go for anywhere close to $3B, if it happens at all. This is likely a negotaition tactic to drum up interest (and/or the price) from other potential acquirers.
Jet is growing at a staggering rate month over month. They are at over 1.1 billion in sales annually in under a year. Yes, while spending money to do it, but you can't magically get paying loyal customers without any advertising or incentives. Amazon didn't do it by making money either.
Amazon is at roughly 86 billion (I'm sure it's more) in sales online, Walmart is at 12 billion online. Amazon is growing in the double digits Walmart is in the single digits online. How is Walmart going to catch them?
If jet is at 4 million+ loyal customers in a years time being live, how exactly is it dumb to buy a company that is at 1.1 billion in sales in a years time when it took you 10 years to get to that? How long has Walmart been selling online? Jet will pass Walmart in under 2 years, then what will Walmart do to beat Amazon?
I think people on hacker news live in la la land. Ecommerce is very different from your googles and facebooks.
Marc Lore knows exactly what he's doing, he probably won't sell it to Walmart for that little.
I doubt many of them are loyal. Most ordered from Jet due to huge discount codes, making them the cheapest. I'd love to see how many people place a second order, one with no discount code.
What is it with people on hacker news? You all love Amazon or something? Chances are a lot of them are coming back because their system, at jet, is guaranteed to be cheaper if you buy multiple things. It is why they have double the order size when compared to Amazon, at least according to the news articles.
Amazon is about to close down every Walmart in America. They are going to shut down the number one employer in the whole country. It is absolutely on its way.
I for one hope we have a few players in this space.
> Real, sustainable competition is what makes capitalism great. Jet spending $800mm+ in a year and taking a loss on every sale is not sustainable.
OTOH, spending and taking losses like that is often the cost of breaking into a business with established competition, even if you have a fundamentally better model -- a bit part of what every business wants to do is establish the kind of "moat" that makes that kind of thing necessary for any would-be new competitor.
What is to stop Amazon from duplicating this modal if it gets traction? What is their moat?
Amazon released Prime Now about 9 months after Google Express and will copy any other successful e commerce trend and do it way better than another startup.
This buyout is based on FUD, and FUD-based investment is a recipe for disaster.
From the OP:
>But for both Jet and Wal-Mart, Amazon’s frenzy of warehouse construction and fast delivery—as quickly as one-hour—have proved formidable. The retailer has logged three straight quarters of record profit while locking in an estimated 60 million members to its $99-per-year Prime service, cultivating a loyal customer base and giving consumers fewer reasons to shop at traditional stores.
The answer is not buying a unicorn startup with seemingly no fundamental advantage over Amazon. If I were Wal-Mart, I would take the $3B and try to build a great technology organization and/or fund Wal-Mart Labs more. So much of what makes Amazon better is the data accrued over the last 18 years and the insight mined from them by their super-talented team.
And Jet.com is definitely not going to give that to Wal-Mart overnight. If I were them, I'd focus on long-term viability, not a short-term hack to placate shareholders.
Upper management is filled with cargo cult thinking around technology. I see it even in software companies.
Someone advocating a rational, realistic way forward (like you) would be pushed out in favor of people who "get it" and want to "move things forwards dramatically"
Isn't that what the culture of a business is? A bunch of people who think similar things. If you take a bunch of similar people and apply the same rewards, behavior would tend to be similar.
partially why consultants can come in and clean up shop. They don't care about following the conventions.
They might be smart but they haven't been successful. They almost immediately abandoned their original value proposition-- make money on the subscriptions like Costco and break even on sales.
And the response was clearly questioning the argument put in favor of that point, thus making the point itself questionable.
It's a strange world when a startup that was just founded 2 years ago and is steadily growing [0][1][2], is considered a failure because they haven't already wiped out a 22-year-old goliath that has had a long history of struggling to break even, and operates in several other markets (AWS, Streaming Video, Devices, etc) that aren't this startup's main focus.
My question, though, is whether Jet is "losing money on every sale but making it up in volume." That is, your articles mention how jet aims to be about 5% cheaper than Amazon, but they say nothing about the long term cost structure that would let them sell at these cheaper prices and still be profitable.
This super smart team didn't even know how to configure Cloudflare. Non-US access got blocked with a captcha. This same company disabled downloading their app if you weren't in the US. And then the site would plaster big scary banners telling you a ZIP code was mandatory and if you weren't in the US, beware! Who comes up with this stuff?
Somehow, with all that money raised, they failed to realise there'd be some customers using freight forwarders.
When I went to purchase, the site stopped working, just providing some sort of generic error page. I called them up. A lady told me they were "performing maintenance" (middle of day). The website provided zero indication; just appeared broken.
Shipping took a while.
I'm certain they have smart people. But my anecdotal experience was that things were a bit clueless and not even remotely close to the level of taking on Amazon in any way.
You seem to forget its a startup and not a well oiled industry giant that has been around for ~20 years.
Maintenance to fix a security critical bug in the middle of the day to remain in compliance for credit card processing could have been a reason for this nuisance. Lots of factors and variables.
I'm not sure I understand, or rather I don't think you understand their business model...
I think they set up their CloudFlare 100% correctly.
Jet does not sell outside the U.S., they have no plans to ever sell outside they U.S. Most of the cyber attacks against them are from outside the U.S. Their entire business plan is cutting cost out of the supply chain inside the U.S. By bundling items together in the same box and saving the consumer in the U.S. Money.
The entire point is to reduce the risk footprint, when most startups are being hacked left and right jet is being very smart by throwing captchas and saying to everyone outside the U.S. we don't want your scammy business.
They do sell to people that are outside of the US. They just sell via freight forwarders. In Central America (and probably all over) there are many businesses that exist entirely to service customers. The biggest bank in the country I'm in now (Guatemala) gives people credit cards and a Miami address specifically marketed to buy stuff off Amazon.
You'd think with all that money spent, they'd have recognized this. FWIW, they eventually fixed it, a week or two (or so) after several poorly-written emails I sent them. So I think it is more likely to be the result of bad thinking, or just being unaware of the situation.
Furthermore, if their anti-hacking defense relies on a captcha or not being able to easily download their app, they're beyond screwed. I don't think they are that incompetent, it might have been, at best, oversight.
Probably the fault is at least partially on Cloudflare, though. Trump's read-only campaign website throws up a captcha at least to Guatemala. And GT isn't known as a centre of any hackers, to say the least. So if they have high profile sites like that which are misconfigured, perhaps they don't do enough review or customer education.
The captchas serve to stop bot nets and DDoS attackers who are all over the world. It is why many sites throw those up. It is not a miss configuration. It is a smart move.
It is 100% the wrong thing to do. On a static page like Trump's website, it is absolutely unacceptable that it ever shows a captcha to obtain readonly information. They are already handling the TCP connection, they are sending back the static assets (custom error page). They just don't send the main content.
Unless it's under a current attack, and even then it should go by IP or something. Visiting from an IP never used before should now throw up a captcha. Nor should it continue to do so on repeated visits.
It's broken, full stop.
Edit: I mention Trump's site because it's a reasonably high profile, static, site that I've seen CF blocking on. Also, FWIW, after I sent several emails to Jet, they seemed to reverse course and their app and site are available. Seems like an oversight/not knowing to me. CF's defaults are not very good so they probably didn't change them. CF should review their customers and suggest better defaults, at least to high end clients.
Just to clarify, given the highly defensive yet also authoritative sounding posts this account has made since being created apparently specifically to respond here: do you _work_ for Jet, fowlerpower?
> Jet has a super smart team looking at ways to gain margins in areas amazon is ignoring
So does Walmart Labs, though. What makes Jet a better buy? Even if they've proven successful as their own company I'm super-skeptical of any startup merging with a larger organisation and retaining anywhere near 100% efficiency.
One of the way forward I see is that, Walmart will let Jet be Jet but will the major source of the products etc. Mostly growing from the back-end of it. Enabling things like same day delivery in certain instances. I would actually let Walmart groom Jet as a separate brand.
my guess is that the IT department for the whole organization for x years totals $12B. Some IT manager probably mentioned to someone near the c-suite that they were working on some cool internet commerce stuff. And then after the story has been passed on and on it gets reduced down to "$12B spent on labs"
Jet, based on its promotional content is heavy into the home products category. Walmart would love to knock them out to absorb that competition to getting delivery and even subscription delivery of home products.
So it may be the price Walmart is willing to pay to ensure nobody is making Jet their new source for houseware products and avoiding the WalMart Brand. We also don't know what else Jet has in the pipeline, negotiating with them and through their research may be revealing more to WalMart.
all said, I hope Walmart doesn't buy Jet. I want Jet to exist on its own. Competition is the way forward in shopping, if not against Walmart, definitely against Amazon.
What surprises me is that in many European countries, you can now order ALL of your groceries delivered.
You place an order, and someone physically walks around a local supermarket, picks up stuff, they put on a van, and it is delivered to your home. It is actually very inexpensive (and free if you spend enough).
Yet nobody in the US does that (well nobody outside of big cities). Walmart right now today has a HUGE advantage, they can deliver products impossible to Amazon like fresh fruit and veg, meats, and all kinds of things.
But yet, do they? No. Walmart already has "warehouses" in every state, city, location. They're called stores. But instead of double dipping on that advantage, they keep using them as traditional retailers while Amazon rules the home delivery advantage.
Amazon are currently moving into an area Walmart already has an advantage in (being local) but because Walmart under utilises their advantage to such a large degree, Amazon is left alone to do so.
> What surprises me is that in many European countries, you can now order ALL of your groceries delivered.
You can do it in much of the US, too; a number of brick-and-mortar grocery chains offer online ordering home-delivery services, even before considering third-party or online-only grocers.
> What surprises me is that in many European countries, you can now order ALL of your groceries delivered.
In the US my local grocery (Harris Teeter) has a service where you order online and go through a drive through to pick up. The cost was $4.95/order or $99/year. They have recently added full delivery for $14.95/order (not sure on the yearly fee).
one or more shops near me in the U.S. suburbs has delivery. It's inexpensive but to keep it efficient the product range is more narrow. So they wont be getting your particular favorites, the essentials are covered. as somebody else pointed out though inspecting produce for delectability isn't going to be their concern.
I have three young kids and it's very difficult to go shopping with them. If they're not causing problems, they're taking up space in the cart. Sometimes when my wife and I go together with the kids, we push one cart with the kids piled in and one cart for the actual groceries.
Being able to order our groceries online and have them delivered or picking them up in some kind of drive-through lane is a huge quality of life improvement for families like mine.
I live in Maine, I bet it's Hannaford that you did this with. I use it all the time, in fact I almost never actually into the store anymore if I can avoid it. Not sure I could live with out it any more! :)
For packaged things sure, but who wants someone else picking out potentially crummy vegetables/fruit/meats? Do you inspect them while they arrive, and then what about rejecting them? Looking through produce and meats is part of the market shopping process.
> Yet nobody in the US does that (well nobody outside of big cities).
Because outside of the big cities, you don't give up a minimum of 2 hours of your daily life just driving to and from work. It wouldn't make sense to have someone take of tasks like that.
Walmart's brand in the UK - ASDA - provides online shopping with both collection and home delivery services. Not really sure why they don't do it in the US.
Man, I must seriously have been unlucky in the places I've lived so far. Seriously never even heard of this being a thing until reading articles about Instacart and then Amazon Fresh, and thought "wow, wonder why nobody has done this before". Until this thread I still thought those were practically the only ones, and then only in like one or two cities.
It's definitely a good time to join or start one: Verticalized Consumer Packaged Goods startups with solid software infrastructure (hence the ability to power logistics/distribution/etc. with software) can undercut incumbents while maintaining a healthy margin.
I think the key phrase here is _verticalized_. Go-to-market as well as scaling operations is much easier when you can focus on a single product category.
Given the proposed price relative to funding raised it's likely the investors will get their money back plus a small return, employees with options will likely get nothing or perhaps a token amount (after all the preferred terms are cashed in) and the founder gets to sell off another highly unprofitable business.
This will be chalked up as a "failed" startup but at least the investors get to take their money and play another round elsewhere. For the employees this is likely not a great thing. I'm guessing when they joined a hyped up startup it was in large part because they didn't want to work for companies like WalMart and stood to strike it rich if Jet went public or hit it big. Now they could be wearing a WalMart badge and the company sold out to save the ass of its investors.
Really, you are claiming that if a company raised $570M and sold for $3B, the common shareholders will get screwed? Do you have some information we don't? The publicly reported valuation at the last funding round was $1.4B. Those would have to be some impossibly harsh terms to not leave well over $1B to the common shareholders.
The price in these "the business model didn't work so let's save the investors and sell" type deals is primarily driven by paying off the early investors. Term sheets typically say these investors make a decent return before anyone else gets paid.
Conversation at the deal table is usually something like "we need X valuation to meet our term sheet with investors so the founders and a few others get paid." The rescue buyer generally doesn't care about what the employees get, in fact it's very much in the buyers interest that the employees don't get too much.
In other words the size of the valuation being bounced around is likely not driven by the value of assets for shareholders but rather the size of the contractual hole in the ground that founders dug with their investors... to escape that hole $X is needed.
> "Those would have to be some impossibly harsh terms"
Harsh terms yes, but not uncommon.
Preferred shares are common for investors that pay out at a multiple of the common shares, so in an exit the preferred pool can be paid at a dramatically higher rate than common shares.
Funding often also comes with guarantees on return - i.e., if the exit price is below a threshold, the investor gets a guaranteed minimum return before other are paid. This works out for the company if it's a smashing success (the upside is also capped) but can wipe out common shareholders if the company sells for anything less than stratospheric valuations.
This should be a lesson to anyone thinking about working for a startup: a company raised $570M and sold for $3B, and in all likelihood the employees will receive very little from this sale.
In the modern startup fundraising scene, and the way startup equity is structured for employees, if your company exits for anything less than a mind-boggling headline-making valuation, you are almost certainly receiving little to nothing.
I feel you just haven't proved your claim given the numbers. Even if the last round's investors were guaranteed a 3x return, that only takes up $1B of this $3B.
Granted, I don't think many engineers are making out with seven figures here, but they should be making whatever their shares were supposed to be worth at the most recent valuation. That's if they joined after the last funding round, more if they joined earlier.
What asset does Jet have that it is worth anything close to $3bn?
Loyal users? Nope. Their version of "prime" is the proverbial pig in a poke, as you need to buy that one before you can actually figure out if you like to become a longstanding customer (experience, logistics, price/value, positive surprises). Most users are just the coupon cutters who will switch to whatever next crazy person is offering loss leaders.
A strong brand? Plastering NYC subways without having launched does not mean a viable brand. Also they nowadays focus pretty much only on performance marketing. So nope.
Strong technology? Meeeh...
The rationalization at Walmart HQ probably is that with Walmart's purchasing muscle they might improve the unit economics a lot. But why buy a flash in the pan in the first place...
Jet.com was founded in 2014. How did they get enough traction to be viable when there are so many other online retailers like Amazon, and all the other brick and mortar retailers that also have large online presence.
They raise about $820 million and just spent virtually all of it, outside of operating expenses on marketing. For almost a year, they were advertising everywhere before they had even launched. If i am not mistaken, i think they were boasting of the highest number of pre-launch signups for any company. So that already gave them a huge valuation and potential traction.
They eventually launched, with a mixed reception, but they had enough numbers to keep them relevant.
They've actually done very well with "hype" as it were. I guess this goes to show that you too can spend tons of VC dollars, make yourself "popular" and never make any money, but the popularity is enough to make you worth money, even though you're losing money. Fascinating. I almost wonder if they should sell now, just in case they run out of VC "at some point in the near future" and stuff hits the fan...or maybe they'll be "worth" far more in the future, hard to tell...
I'd be careful about drawing too many conclusions from this story. For one thing, you are not Marc Lore. With a successful Amazon sale under his belt, he certainly had a leg up on fundraising over almost anyone. His name alone helped to generate buzz.
But even being Marc Lore is enough. I worked for his cofounder from diapers.com and you've probably never even heard of that company—building hype requires a compelling narrative, not just a big name.
This has worked with chat apps and other kinds of community-based social networks for ages, where the promise that after you've grown large, you'll figure out a way to monetize later.
What's remarkable is Jet was able to pull this off by being in meatspace, by acting as a VC-subsidized arbitrage broker for consumer products, hoping to get enough mindshare to be considered more of a threat than a nuisance so it can get bought out. It worked!
It's just a misunderstanding of what the acquiring company is actually buying. When a company acquires a startup, they're doing it so they can get control over that startup's users. They really don't care about the technical or financial details, they just want authority over those millions of eyeballs.
I'd love to see their return customer number. If you hand out money, user acquisition if measured by signups is pretty meaningless.
I tried this site once and it was a disastrous experience. Their customer service is horrendous, and the complete opposite of Amazon. After that purchase it became pretty clear to me that Amazon has nothing to worry about.
This reminds me, I have around $100 in credits from 1 failed order because they messed up multiple times. Would be awesome if they sold Amazon gift cards.
I think they've been spending a lot of money getting new users. They've been offering new accounts discounts, I think you can get 15% to 20% off right now. They've had a bunch of items show up on some discount shopping forums like slickdeals. I think they've lost money on some purchases.
We should understand that this is really what companies are buying when they buy a product. There seems to be an impression that companies buy technology because it's cool. That's almost never true, because they could hire similar engineers and build it out themselves for much cheaper than they could buy a company.
They buy the company because they want something that they can't easily replicate (which, again, is NOT the technology, because they can hire engineers and replicate your work product).
Typically it's one of these things:
a. they want your installed userbase. It's really hard to get people to use something new. If you have a lot of users, they will buy you even if your stuff is total crap so that they can get access to your users.
b. they want your intellectual property, like a patent and/or trademark portfolio. Patents are a great way to make companies think about buying your company instead of just ripping it off and copying it internally.
c. they want to retain the personal goodwill of someone they care about. For example, investors will often buy each others' portfolio companies, even when they're worthless, as a way to save face and ingratiate themselves one to another.
It's important, as entrepreneurs, that we understand what really goes into a big exit, and how it's not tech (unless you have patents, in which case they're buying the patents), but installed base.
Yeah, I even remember a rumor going around that they were dropshipping for some items. If something was out of stock they would get it from newegg or amazon and send it to you.
I have a theory about this, it happened to us when we bought some childrens books on Jet. They came in the mail from Barnes and Noble with a packing slip that had a price higher than we paid included with it.
It doesn't explain the Amazon example you mentioned, but I was under the impression they have special affiliate arrangements with 3rd party retailers and that they were somehow being allowed to invest their affiliate commissions into the consumer (which is typically not allowed).
So if they're making 15% affiliate commissions from B&N they're able to drop the consumer price 10%. They've been focused on scale more than margin since day 1, so it would make sense that they would just operate on something razor thin and continue to drive home that they have unbeatable prices.
For the 3rd party retailers it's a way to compete with AMZN on price without actually having to drop their prices and I can see how that would be attractive to a retailer that's losing market share.
No - Many sellers that sell on Jet are just re-selling their Amazon inventory in a new market. Amazon will happily ship it for you to Jet company through the MCF program.
I've often wondered about this. Each time I've compared Jet against prices from other retailers, the results have been underwhelming. Occasionally someone mentions a slightly better deal on Jet, but nothing that would rationalize the hype around this company. I'm assuming that Jet was just intended to be a short term play, ending with a float to an established retailer.
> That'd be a killer position for Microsoft to be in.
What do you mean by this? I don't deal with things of that scale, but I would imagine it would put Wal-Mart in a very good position to negotiate down near at-cost. It could be good for Microsoft on the PR front against Amazon, but bad for profit margins (on this one account).
They would be a hero customer. From my understanding, Jet.com is already a reference customer, which means that they talk about intimate details about their infrastructure with prospective Microsoft customers.
A hero customer typically pushes your platform in radical ways to let you know what to improve. They're also someone you can talk about, and it instantly gains you credibility. For Azure, actual workloads are lacking, especially workloads that are volume, B2C businesses a la AWS's Netflix, and GCE's Spotify.
Depends. Netflix doesn't get any kind of sweetheart deal with AWS. As far as I'm aware the prices they pay are exactly the same as what any other high volume customer would pay.
Erlang has been and is in use in many less visible places, same as other frameworks, but WhatsApp provided visibility in the contemporary world of short-lived startups.
There are a lot of product categories I've found its impossible to compete in because jet has this combination of impossibly low prices, and stupid high cpc's on Google. I wonder if an acquisition will bring things to more sustainable levels?
When you are an investor and have tens or possible hundreds of investments, 3x will not cover much. You need one to leave orbit in order to stay in the game.
Interestingly not a huge exit its "just" 3x. (Edited from 6x I looked at investment not valuation originally) For all the news around Jet taking on Amazon I'm not sure this is signaling a win for them.
It looks like the $1B figure is a pre-money valuation for the $500M raised.[0] If so, that results in a 2x exit for those investors.[1] This assumes those investors don't have rights that would entitle them to more than their pro rata of the acquisition proceeds, such as special liquidation preference rights that would entitle them to more than a 1x liquidation preference. It's these kinds of special liquidation preference rights that have attracted some attention for helping "juice" valuations, particularly with unicorns.[2]
[1] Math: $500M invested at $1B results in those investors owning 1/3 of the company. Assuming pro rata distribution of the acquisition proceeds, they would get $1B in a $3B acquisition.
I have mixed feelings about this. Jet started up next to the town where I live, and after growing for a while they moved to the town where I used to live. I'd been watching their job postings since early on, and I probably could've gotten hired early. Their recruiter recently reached out to me, so I could probably still get hired there.
If they get bought out, I'd have missed out on potentially a very nice options payout. But then I'd have to find a new job, because I definitely wouldn't want to work for Wal-Mart. So I guess I'm happy with the decision to stay where I am, despite some of the drawbacks of working for a really tiny non-startup company. (Not that there aren't good perks too.)
For those of you who spend your careers in startups, how do you feel about new owners after a buy out? If you have reservations about them, do you stick around and see how it goes, or head straight for the exit?
Being acquired is always seen as this awesome thing but it can be terrible for a lot of people. I didn't have enough equity to make enough to buy a used Honda Civic. I don't care for the culture of the new company but I'm still working there. Pretty much everyone on my direct team left, found a new position in the new company, or were let go. The same thing happened in most areas. Our founders did take care of us by ensuring we get 4 weeks of vacation instead of having to wait 15 years for that, so that's something. Another plus is that I managed to double my startup salary.
I have to hand it to Marc Lore. Two spectacularly unprofitable businesses, with two spectacularly large exits. If this guy had been doing startups in the late 90's, he'd probably be the worlds first trillionaire by now.
Jet is on pace to do $1B in sales this year (not profit, but gross merchandise value). Not bad for a company only selling stuff for 16 months.
They aren't a direct competitor to Amazon in model, they are closer to a seamless version of Flipkart in india.
My friend who works there says they see Target as their competition more so than Amazon, and that could be what Walmart sees too.
I do wish we could have seen where this company could go, but likelihood is it became increasingly difficult to attract VC money in this market that is tightening.
Goes to show just how entrenched some of the negative feeling (not everywhere, but where it exists, including with many in the Amazon demographic) is about Walmart.
Wal-Mart should focus on getting rid of (transition) its old mentality management and try spending top dollar on hiring top talent from the industry. I happened to work with Wal-Mart tech teams and their hands are tied by stubborn warehouse-manual-gears mindset of upper management. Basically our company had a nightmarish experience when we were integrating our services product with their internal tech products.
All of these companies (Walmart, Bestbuy etc) are trying to compete with Amazon by offering things like price match etc. Sure it is nice to have a price match from Bestbuy and pick up your product on the same day from Bestbuy. But Amazon came back with a KO punch and offered Same-Day/One-Day shipping. I can basically order it before midnight of the previous day and have it at my doors by max 7pm the next day. Amazon has successfully created a concept of brand among household consumers. They are the Apple of household consumerism and most people don't want to buy from uncool brands. When I search for a product on Google shopping and if the price is same on Amazon and Walmart, I would pick Amazon because of "PRIME" shipping. Even if it is $1 cheaper on Walamrt I would still go for Amazon. Brand loyalty can't be bought with $3B. Brand loyalty needs to be created at grass root level.
When Jet.com came out, I often checked it against Amazon, and did make some purchases through it. But there's some odd gaps, it has no category through which I can buy Blu-rays, for example. And it has huge inventory gaps on very basic current items. I honestly forgot to keep checking what I could get through it, as the gimmick of adding up a bunch of items for savings rarely amounted to very much.
Totally agree, jet just...doesn't have some things. But it does have some other things, and sometimes slightly lower than amazon. It's so low I almost made a purchase with them once!
I have tried them a few times but it's a lot of work finding the items where they are actually significantly cheaper than Amazon. They also don't have reviews and the item descriptions are often really short and incomplete.
Wonder if the "tip" is part of a strategy to shop the deal, like the LinkedIn post-mortem revealed. Last I heard, Jet.com was haemorrhaging cash buying more growth with massive discounts.
Looks like it would be a good exit given how much capital they've raised: $565M per crunchbase.com/organization/jet. 6x capital in means everyone should make good money.
I'm not sure if Jet's business model is valid, or if it's valid at all.
Back in Fall 2015, I ordered two cases of water (I think 24 count in each; normal 500 mL water bottles) for $5.70 each with free two day shipping. They ended up sending me two packages via FedEx Ground (one case per box) with Jet.com branding on the boxes. I was legitimately shocked that they actually processed my order since each case was 30 pounds. They lost so much money on my order. When I checked back two weeks later, they were no longer for sale on the website.
I agree that I can't understand how jet.com will stay in business with their current shipping practices. I have ordered over 100 pounds of cat litter from them at below market prices all with free shipping.
Every other order I've had (3) something has been broken during shipping (as well as two of the cat litters) due to piss poor shipping practices. They put a whole bunch of stuff including crushable and fragile stuff along with bulky heavy stuff in one HUGE box. Of course all the bulky stuff crushed the fragile stuff, who thought that was a good idea? So they not only refunded the broken items but gave me $5 credit.
On top of that they gave 30% off my first order and 15-20% off the next few orders.
That's not a sustainable business.
They also had a couple of really good AMEX offers in the last six months but I don't know if they pay for that or AMEX does.
While this is a definite failure for Jet's optimistic investors, it's likely a great opportunity for Wal-Mart to challenge Amazon, and a win for consumers. It's also a big win for OCaml.
I tried shopping at Jet and while some of the prices were very good, others were worse than Amazon, and little things like product detail information, pictures, etc., were strongly subpar. Product search was also in serious need of tuning.
Does anyone know which pieces of infrastructure (or ops) that Jet built have the most value to Wal-Mart?
All i know is i shopped on the site exactly once. i ordered 2 cases of monster drinks at a fantastic price. Looked exactly like the amazon page. When they arrived they were 'monster hide safe cans'. Basically empty cans. When i tried to return they wanted 40% restocking. Total Fraud.
I tried to shop for Gatorade and Clif Bars on Jet recently, knowing that it's promoted itself with home products and such. What I found were comical prices ($127.10 for 21 oz. of Gatorade mix) for a poor selection, so I gave up on it. I don't really know what value Walmart gets out of this purchase other than a heavily promoted brand and the ability to go back to focusing on Amazon. It feels like Yahoo and Tumblr.
Clearly jet.com's primary user base isn't from the tech crowd. Looking at the comments, seems like a lot of people don't understand that Jet's user base is probably value-conscious consumer's that shop for household items on a recurring basis. Without knowing any numbers I'm surprised at all the backlash in the comments.
In my experience, jet.com's primary user base is deal fanatics who enjoy having their consumer goods subsidized by know-nothing VCs dreaming about being in on the ground floor of the next Amazon.
Walmart has been offering 3rd party sellers/products for more than a few months now, if I had to guess. I bought a USB cable from Cable Matters, but the names of some of the companies/sellers on Walmart's website also lead me to believe they are selling products which aren't certified and have the correct components to be safe with our devices.
Yeah I know what you mean, I just ordered a cable from Walmart.com the other day not realizing it was from a third party seller until after it shipped. Felt like a bait and switch.
I propose that Walmart needs to use their bulk purchasing power/clout, in combination with the efficiencies that Amazon has put in place, to provide lower prices. If you're going to unseat Amazon, it has to be on price.
Wal-Mart can't even leverage their ubiquitous brick and mortar presence to be un-terrible to use for ship-to-store during the two times I tried to use it. Don't think this will end up being an Amazon killer.
Well, Jet isn't the only company to use F# (just AFAIK, the only consumer-facing startup). I can't imagine Walmart wholesale replacing their codebase with whatever the folks at Walmart Labs like to use, as that would be incredibly stupid of them.
> It takes a certain degree of conceit to think a company can only be valuable if you heard of it.
No, but it's entirely reasonable to suggest that an e-commerce company that's trying to compete with Amazon isn't valuable if you haven't even heard about it in passing from friends or family.
Before everyone gets up in a big frenzy on the price, read the article (closely):
"It isn’t clear how much Wal-Mart would pay, but a person familiar with the matter said Jet could be valued at up to $3 billion in private markets."
That is nowhere near a statement that $3B is number from Wal-Mart. That means "someone" thinks they COULD be valued at UP TO $3B in "private markets". That "someone" could be Jet's CEO. Or their banker.
Wal-Mart isn't dumb. In fact, they're the opposite of dumb when it comes to paying for things. They wouldn't pay $3B for a failed ecommerce startup if they can let it fail and buy the assets or pay much, much less in various other scenarios.
I doubt we'll see this deal go for anywhere close to $3B, if it happens at all. This is likely a negotaition tactic to drum up interest (and/or the price) from other potential acquirers.